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The BC Securities Commission ("BCSC") has adopted a whistleblower program that will provide possible financial rewards for information that meaningfully contributes to enforcement results against others who have committed investment fraud and other serious types of market misconduct and, concurrently, outlined the BCSC's credit-for-cooperation policy with respect to the possible granting of cooperation merits credit for self-reporting and/or cooperation by those who have committed such securities law violations.
BC Policy 15-604 - Whistleblower Program (see here) provides guidance on the BCSC Whistleblower Program, which is administered by the BCSC’s Office of the Whistleblower. The purpose of the Whistleblower Program is to encourage individuals to voluntarily provide information to the BCSC’s Office of the Whistleblower by financially rewarding them for this information. It should be noted that the Ontario Securities Commission ("OSC") launched its own whistleblower program in July 2016 which was the first of its kind by a Canadian securities regulator.
The BCSC will use a special online portal (see here) to receive whistleblower tips, which can be completed online, mailed, or called in. A whistleblower can submit their own tip or they can get help from a lawyer. Whistleblowers can file their tip anonymously, but they must reveal their identity to the BCSC before receiving an award and whistleblowers are protected from reprisal by British Columbia’s Securities Act, which prohibits retaliation that is solely the result of a person providing information to the BCSC.
The BCSC will give awards if the information provided leads to enforcement action by the BCSC against another party (you cannot report yourself, see below regarding cooperation credits), including:
a halt trade order;
issuing formal allegations
sanctions after a hearing
a settlement agreement, and
the identification and location of assets of people who have been ordered to pay financial sanctions.
The BCSC’s whistleblower awards will range from $1,000 to $250,000, and will be determined by how quickly the information was reported, how much the information contributed to the enforcement outcome, and the seriousness of the misconduct, among other considerations. A whistleblower also could receive more than one award for the same information, with the maximum payout capped at $500,000. The BCSC’s Executive Director, after considering the recommendation of staff, will determine the amount of the award, if any.
BC Notice 15-701 - Credit for Cooperation in Enforcement Matters (see here) explains the benefits of cooperating with the BCSC when facing possible enforcement action for violations of securities law, and the factors that the BCSC will consider when determining whether such cooperation merits credit in enforcement matters.
BCSC staff may recommend, with respect to any cooperating party, any of the following measures:
not commencing enforcement proceedings against the cooperating party;
commencing enforcement proceedings but with less serious allegations
seeking a reduced sanction after an enforcement hearing;
settling your matter on less serious allegations or with reduced sanctions;
reducing or not seeking costs of the investigation; and/or
not referring the cooperating party's matter to the criminal authorities.
The final decision with respect to any credit for cooperation rests with the BCSC's Executive Director, a BCSC settlement committee, or the BCSC Hearing Panel, as the case may be.
Endeavor Law recommends, generally, that persons contemplating the use of these programs do so with the advice and assistance of legal counsel. While, on its face, each of the policy and notice referenced above appear simple, the implications of such actions and the qualified legal protections available should be fully understood.
Does not constitute legal or other advice and must not be used as a substitute for legal advice from a qualified legal professional in your jurisdiction who has been fully informed of your specific circumstance. Information may not be up-dated subsequent to its initial publication and may therefore be out of date at the time it is read or viewed. Always consult a qualified legal professional in your jurisdiction.